Summation will make you think ... by Auren Hoffman ... since 1997 ...

Oct 01, 2012

"What You Know" now beats "Who You Know"

The old adage that “it’s not what you know but who you know”
is so entrenched that we don’t question the premise. Undoubtedly, who you know
has been important throughout history, whether in the trade networks of ancient
Greece, or in the dense web of high tech companies in Silicon Valley. A good
network is especially important when capital is scarce, information hoarded,
and when finding the appropriate contacts is difficult. For most of history,
knowing the right people was crucial if you wanted cash and cache.

In a Harvard Business Review article entitled “How
to Build Your Network,” Brian Uzzi and Shannon Dunlap contend that “Networks
determine which ideas become breakthroughs, which new drugs are prescribed,
which farmers cultivate pest-resistant crops and which R&D engineers make the
most high-impact discoveries.” They cite the 1998 work of University of
Pennsylvania sociologist Randall Collins who showed that breakthroughs from
icons such as Freud, Picasso, Watson, Crick, and
Pythagoras were the
consequence of a particular type of personalnetwork that prompted exceptional
individual creativity.

But with tools such as LinkedIn and Facebook, the ability to network is becoming
more democratized. If before it was difficult to ferret out the perfect
contact, today finding a right marine biologist in New Zealand or the genetic
researcher in Norway is as easy as a Google search. And social media has made
it even easier to connect with that person. As for capital, today it is relatively plentiful and accessible, and it is much
easier than ever to get access to people who have it (accessing capital can be
as easy as sending an email).

Information, too, has been democratized. It used to be that if you wanted to
get access to cutting-edge ideas in technology, you needed an invitation to an
exclusive conference like TED, or to attend a university like MIT. Today, TED
lectures and MIT courses are offered free online. The only barrier to most of
the world’s best information is knowing English. Because it is so
accessible, public information offers less competitive advantage than
previously.

Given our hyper-connected world, could it be that “who you know,” while still
important, matters a little less than in the past? Could it be that “what you
know” carries more weight?
My intuition is that “what you know” has now crossed the line to be more
important ... and possibly even MUCH MORE important ... than “who you know.”
Like Kurt Vonnegut said in Breakfast for Champions; “new knowledge is
the most valuable commodity on earth. The more truth we have to work with, the
richer we become.”

In today’s world, if you know something really compelling, you will be sought
out ... and sought out directly. Dorothy will follow the World Wide Web
equivalent of the Yellow Brick Road to come to you. In the past, the people
with connections were gatekeepers who controlled access to the elite circle and
got paid handsomely for that. Today, people that invent interesting things (the
true What-You-Know people) will reap many more rewards than the brokers who
make introductions.

Even professions such as banking and law are becoming more specialized.
The lawyer that understands the intricate tax implications of U.S.-Brazil
joint ventures is now much more valuable than the generalist lawyer that
introduces you to that person.

I’m not saying your network isn’t important – it will just
be less important than it has been in the past.
Even the Wizard of Oz was looking to network: just before he leaves the
Emerald City he tells Dorothy that he is off “to confer, converse and otherwise
hobnob with my brother wizards.”

In the new world of abundant capital, easy access to information and people
with knowledge, it’s what you know
rather than who you know.

Comments

The old adage that “it’s not what you know but who you know”
is so entrenched that we don’t question the premise. Undoubtedly, who you know
has been important throughout history, whether in the trade networks of ancient
Greece, or in the dense web of high tech companies in Silicon Valley. A good
network is especially important when capital is scarce, information hoarded,
and when finding the appropriate contacts is difficult. For most of history,
knowing the right people was crucial if you wanted cash and cache.

In a Harvard Business Review article entitled “How
to Build Your Network,” Brian Uzzi and Shannon Dunlap contend that “Networks
determine which ideas become breakthroughs, which new drugs are prescribed,
which farmers cultivate pest-resistant crops and which R&D engineers make the
most high-impact discoveries.” They cite the 1998 work of University of
Pennsylvania sociologist Randall Collins who showed that breakthroughs from
icons such as Freud, Picasso, Watson, Crick, and
Pythagoras were the
consequence of a particular type of personalnetwork that prompted exceptional
individual creativity.

But with tools such as LinkedIn and Facebook, the ability to network is becoming
more democratized. If before it was difficult to ferret out the perfect
contact, today finding a right marine biologist in New Zealand or the genetic
researcher in Norway is as easy as a Google search. And social media has made
it even easier to connect with that person. As for capital, today it is relatively plentiful and accessible, and it is much
easier than ever to get access to people who have it (accessing capital can be
as easy as sending an email).

Information, too, has been democratized. It used to be that if you wanted to
get access to cutting-edge ideas in technology, you needed an invitation to an
exclusive conference like TED, or to attend a university like MIT. Today, TED
lectures and MIT courses are offered free online. The only barrier to most of
the world’s best information is knowing English. Because it is so
accessible, public information offers less competitive advantage than
previously.

Given our hyper-connected world, could it be that “who you know,” while still
important, matters a little less than in the past? Could it be that “what you
know” carries more weight?
My intuition is that “what you know” has now crossed the line to be more
important ... and possibly even MUCH MORE important ... than “who you know.”
Like Kurt Vonnegut said in Breakfast for Champions; “new knowledge is
the most valuable commodity on earth. The more truth we have to work with, the
richer we become.”

In today’s world, if you know something really compelling, you will be sought
out ... and sought out directly. Dorothy will follow the World Wide Web
equivalent of the Yellow Brick Road to come to you. In the past, the people
with connections were gatekeepers who controlled access to the elite circle and
got paid handsomely for that. Today, people that invent interesting things (the
true What-You-Know people) will reap many more rewards than the brokers who
make introductions.

Even professions such as banking and law are becoming more specialized.
The lawyer that understands the intricate tax implications of U.S.-Brazil
joint ventures is now much more valuable than the generalist lawyer that
introduces you to that person.

I’m not saying your network isn’t important – it will just
be less important than it has been in the past.
Even the Wizard of Oz was looking to network: just before he leaves the
Emerald City he tells Dorothy that he is off “to confer, converse and otherwise
hobnob with my brother wizards.”

In the new world of abundant capital, easy access to information and people
with knowledge, it’s what you know
rather than who you know.